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Office Varna

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07 February

Varna Regional Profile Report 2012

Varna is located in North-Eastern Bulgaria and it covers 12 municipalities with 158 populated areas. The other municipalities in addition to Varna town are Avren, Aksakovo, Beloslav, Vetrino, Valchidol, Devnya, Dolni Chiflik, Dalgopol, Provadiya and Suvorovo. Varna is one of the better developing districts in the country. The GDP per capita indicator is the second highest after Sofia (city) and economic growth is much faster than the average for Bulgaria that ensures relatively high employment rates for the local population. The positive economic outlook is a key factor that drives the inbound migration of people to the district and makes it one of the least affected by demographic changes in the country.


For most indicators, the district was awarded scores above the national average: economy, demography, education, and healthcare. The performance of the local administration and the judiciary also received high scores; these fields which are generally problematic for the entire country.


Varna is well positioned in attracting foreign investment. In this field, the district could perform even better given its demographic breakdown and the relatively high level of education. There is more to be desired in terms of the business environment and physical infrastructure as these play a very important role in boosting the economy.


ECONOMY


Varna is the second richest district in Bulgaria, with a GDP per capita about 7% above the national average, while the rate is still lower than the leading district of Sofia (city). Varna District is one of the fastest growing in the country with a growth rate of GDP per capita (current prices) of 155% over the last ten years. The gross product constitutes 6.54% of the national GDP. Income per household member is within the national average: BGN 3,739 in 2011. The employment rate is traditionally high; according to this indicator the district ranks third after Sofia (city) and Blagoevgrad. However, employment fell sharply after the strongest performance in 2008, by more than eight percentage points, the downward movement far exceeding the national average. In that year, the unemployment rate began to rise rapidly, reaching 10.3% in 2011, ranking Varna District below districts such as Pernik, Blagoevgrad, Vratsa, and Gabrovo. This development on the labour market is logical in view of the shrinking construction and trade. It also reveals a much better diversification of the local economy when compared with the "competing" district of Burgas, that has suffered a much faster rising unemployment over the past two years. Besides tourism, Varna also benefits from a well-established chemical industry, machine building, textiles, ship repair yards, the transport industry etc. The most rapidly developing sector in the district over the past several years was agriculture; 60% of the district's area is farmland.


Development in the district is highly polarised. It is characterised by drastic differences between Varna Municipality and other municipalities. The Municipality of Varna holds over three quarters of enterprises and fixed assets, thus contributing a large portion of business revenues in the district.


Varna ranks third after Sofia and Burgas on the amount of attracted foreign investments, and fourth in FDI per capita. Overall, the rate of investment per capita is significant: second only to Sofia (city) by 2007, and third after Sofia and Stara Zagora from 2007 to 2010.


In terms of funds under the EU operational programmes used by municipalities in the district, Varna ranks second, but these were calculated per capita, Varna would move to the middle of the ranking, occupying 13th position. 


BUSINESS ENVIRONMENT


 


The business environment leaves much to be desired. The district was given a score that is close but slightly below the national average. The main problems seem to be the judiciary, that is estimated as being at a "very low level" by businesses, and the inconsistent tax policy. Respondents are most critical to the speed of the courts (three-quarters of the companies surveyed and involved in litigation over the past 12 months), probity (about three-quarters) and the impartiality of the court (about 50%). As for tax policy, at least in the two major municipalities of Varna and Devnya, local waste collection charges and market stall charges are well below the national average. The same cannot be said, however, of local tax; property tax rates are particularly high, and the same applies to license tax in Varna Municipality.


 


The performance rating of local authorities and the low corruption level are on the positive side of the balance. It does not mean, however, that the administration is actually performing well and that there is no corruption, but rather that the situation is not as bad as in other districts. According to businesses, there are no particular problems with the clarity of regulations, the qualifications of municipal officials and, to some extent, with the speed of service. A major issue seems to be the scope and quality of electronic services.


 


ENVIRONMENT


In terms of its environment, Varna District performs above the national average. The indicators for which the district scores well ahead of others include the capacity of waste water treatment plants and the proportion of the population in towns and villages with public sewerage systems. A treatment plant for potable water is currently under construction in Provadia, while wastewater treatment plants are being built in Aksakovo and Vetrino.


 


In terms of waste generated per capita, the district also performs better compared to others. A major problem for Varna involves the harmful emissions into the atmosphere, being five times higher than the national average. The cause of most concern is that emissions have been steadily increasing since 2005, and only in 2010 a slight decline was registered.


 


INFRASTRUCTURE


 


Varna District is a major transport hub. Transport Corridor No. 8 ends in Varna; the district has an international port and airport, and benefits from one of the densest railway networks in the country. The overall score given to infrastructure, however, is about the national average. The length and, respectively, the density of the road network in the district has maintained a constant level in recent years, that means that new roads were practically not built. There has been a nearly 12% decrease of the length of the railway network in the period 2005-2008.


A major rehabilitation of the road and railway network, and providing a speedway or motorway connection between Varna and Burgas would significantly improve transport links to the district. The project for a highway between the two main coastal cities, however, is set far in the future: possibly for the next programming period 2014-2020.


Varna ranks in the middle of the list according to the share of households with Internet access in 2011. However, the district is much far ahead according to indicator "percentage of people using the Internet": it ranks fourth after Sofia (city), Vratsa, and Stara Zagora. The difference is probably due to the large number of people using the Internet only at work.


Under the indicator for losses of water in the supply network, Varna performs better compared to the national average.


 


DEMOGRAPHIC


 


Varna enjoys the best demographic situation after Sofia (city). The district is densely populated: 130 persons per sq.km., while the average figure for Bulgaria is 70 persons per sq.km. The population of the district grew by nearly 3 per cent over the last ten years. It is due to the high net immigration in the period 2007-2011, that is the second highest after Sofia (city). The rate of natural increase of the population is negative, but it is still better than the country average. A number of second-home owners lives in the district; mostly Russian, British nationals, etc.


People from Dobrich and Shumen, and a smaller number from Sofia, relocate to Varna; movement in the opposite direction is also noticeable. Since 2009, there has been a strong tendency among people leaving Varna to emigrate from the country: between 17% and 24% of all outbound migrants from the district have moved abroad.


Varna is the second most urbanized district in the country, with a proportion of 83.6% of the urban population. The age structure of the population is significantly better compared to the country average: for every 100 persons between 0 and 14 there are 114.2 over 65 years of age, given the 194 and 218 in Pernik in Gabrovo, for example. 


EDUCATION


The overall score for the education system in Varna District is good and above the national average. It is due mostly to the good rate of higher education coverage. There are five universities and three colleges in Varna. According to the number of students in colleges and universities per 1,000 population, Varna ranks immediately below Veliko Turnovo and Sofia (city). The district has the second-highest proportion of university graduates in the population aged between 15 and 64 years (after Sofia). Varna is also the second district after Sofia (city) experiencing a serious shortage of kindergartens.


Problematic areas seem to be the relatively small number of schools per capita and the number of teachers per 1,000 students, that is among the lowest rate in the country. Enrolment rate of students to grades 1 through 4 is within the national average: 95.8 per cent. The rate of enrolment in grades 5 through 8, however, drops sharply to 80.5 per cent, explaining why the percentage of school drop-outs is higher than the average for the country.


Students from the district traditionally perform well at state matriculation exams, with average scores higher than t-hose for the country. The rate of "fail" grades at matriculation is relatively low and, although it rose sharply in 2012, still continues to be below the national average. 


 


 


 


 


 


 


 

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